The Woodside Energy Group Ltd (ASX: WDS) share price has seen considerable volatility in 2022. The last few months have seen the rollercoaster ride continue.
While Woodside shares have gone up 58% in 2022 so far, the oil and gas ASX share fell by 0.6% between 30 June 2022 to 30 September 2022. That compares to a 1.4% decline for the S&P/ASX 200 Index (ASX: XJO).
Interestingly, since the end of the last quarter, the Woodside share price has gone up 10%. That compares to a gain of 'only' 4.5% for the ASX 200.
What's the latest for the Woodside share price?
From the start of the year, energy prices have increased significantly. Woodside has benefited from this because it's selling its production at a materially higher price than it was last year.
The big news over the last few months from the business was its half-year report for the period ending 30 June 2022. It said that in HY22 operating revenue went up by 132% to US$5.81 billion, earnings before interest, tax, depreciation and amortisation (EBITDA) increased to 165% to US$3.97 billion, and underlying net profit after tax (NPAT) increased 414% to US$1.82 billion.
Free cash flow surged 688% to US$2.57 billion and the interim dividend jumped 263% to US$1.09 per share. Keep in mind that the returns I quoted earlier don't include the payments of the dividend either.
Woodside Energy CEO Meg O'Neill said:
Our first results since the completion of the merger with BHP's petroleum business highlight the increased financial and operational strength delivered by our larger, geographically diverse portfolio of high-quality operating assets.
Production for the half year was 19% higher at 54.9 million barrels of oil equivalent, benefiting from the contribution in the month of June of the former BHP assets and improved reliability at our LNG facilities.
Shareholders benefited from the rise in energy prices and the Woodside share price has already risen to reflect that. Investors are now benefiting from the strong dividend payments.
But, the oil price has been going backwards in the last few months, likely because investors are worried about what a global recession may mean for oil demand.
What could happen next?
Woodside's boss pointed to positives in both the short term and long term for the business:
The upheavals in global and Australian energy markets witnessed over the course of the past six months have shone a spotlight on the importance of gas in the world's energy mix and underscores our confidence in the longer-term demand outlook for gas, which makes up 70% of Woodside's portfolio.
Safe and reliable supplies of gas are not only critical to global energy security but will play a key role as our customers seek to decarbonise, alongside new energy sources such as hydrogen and ammonia that Woodside is investing in.
Our strategy to thrive through the energy transition as a low-cost, lower-carbon energy provider continues to progress through recently announced initiatives across hydrogen refuelling, carbon capture and storage and carbon to products technologies.
Some brokers have a view on the business. Morgan Stanley has an overweight rating and a price target of $37 on the business. That implies a mid-single-digit rise over the next year.
Citi rates it as a buy, with a price target of $36.50. That's a potential rise of around 5% over the next 12 months.
